Radar on Medicare Advantage

  • ACHP: Final Rule Checks ‘Untethered’ Agent, Broker Fees Impacting Competition

    After pushing for new limits on broker compensation and other changes to ensure seniors are guided to Medicare Advantage and Part D plans that best meet their needs, the Alliance of Community Health Plans (ACHP) on April 4 celebrated a victory with the release of CMS’s final rule making policy and technical changes for the 2025 plan year. ACHP, which represents provider-aligned, not-for-profit health plans, had spelled out its hopes for these policies in its broader “MA for Tomorrow” framework and provided Senate testimony on the impact of excessive “add-on” broker fees paid by larger plans. After CMS issued its final rule containing new marketing-related policies, AIS Health, a division of MMIT, spoke with ACHP’s executive vice president of public policy, Dan Jones, to learn more about the group’s position.
  • News Briefs: UnitedHealth Reaffirms Full-Year Earnings Guidance Despite Cyberattack Impact

    Although the cyberattack on its Change Healthcare subsidiary cost the company about $870 million, or 74 cents per share, in the first quarter of 2024, UnitedHealth Group on April 16 reaffirmed its full-year adjusted earnings per share (EPS) guidance of $27.50 to $28.00. Reporting financial results for the quarter ending March 31, the company said its Medicare Advantage business saw heightened outpatient care utilization that was consistent with what it experienced in the first half of 2023 and planned for in 2024. Winter seasonal activity that included vaccinations, higher incidents of respiratory illness and related physician office visits have subsided, management said. “If other MCOs had the same experience, it would be most positive” for Humana, “given its guidance for persistent, elevated utilization and investors’ likely preference for a 50%+ EPS recovery story (HUM) over slightly better revenue/EPS growth,” wrote Jefferies analysts on April 17. Revenue for the UnitedHealthcare segment grew 7% from the prior-year quarter to $75.4 billion, reflecting enrollment growth in its commercial and senior segments that was offset by expected declines in Medicaid due to ongoing eligibility redeterminations. UnitedHealthcare highlighted major managed Medicaid wins in Michigan, Texas and Virginia but expressed disappointment in the recent Florida selections.
  • No News Is Bad News for MAOs Hoping to See Pay Hike in 2025

    The April 1 release of final rate projections for Medicare Advantage and Part D plans was largely uneventful as CMS maintained the same all-in estimate of what plans can expect to see, on average, in terms of a reimbursement update next year. But the market did not respond well: MA-exposed insurers’ shares took a tumble and equity analysts warned that a revenue decline — before coding trend — could lead to benefit cuts and footprint reductions.

    Industry trade groups did not respond favorably, either. In a statement released immediately after the rate announcement, AHIP President and CEO Mike Tuffin said the finalized policies would “put even more pressure on the benefits and premiums of 33 million Medicare Advantage beneficiaries who will be renewing their coverage this fall,” particularly as the MA and Part D programs face regulatory and legislative changes.

  • As ‘Focused Audits’ Get Underway, Plans May Struggle to Meet UM Conditions

    Thanks to a final rule published just one year ago, Medicare Advantage plans as of Jan. 1 were expected to meet new constraints when it comes to applying their utilization management (UM) policies, including prior authorization. CMS has said it aims to assess UM-related performance of plans serving 88% of beneficiaries this year, and it intends to accomplish this through both routine program audits and “focused audits.” According to compliance experts, the volume of audit activity since CMS began sending engagement letters in late February suggests the agency is eager to meet its goal, but it may not like what it finds.

  • Part D GLP-1 Spend Soars as CMS Makes Key Coverage Decision

    Medicare is spending billions on GLP-1s, the groundbreaking diabetes drugs that are now seeing skyrocketing demand for their ability to help patients lose weight. While Medicare Part D plans are prohibited from covering weight loss therapies, a new FDA decision for Novo Nordisk’s Wegovy (semaglutide) could reshape the coverage landscape for some GLP-1s — and drive Part D spending even higher. 

    A March 22 analysis from KFF found that Part D spending on Novo’s Ozempic (semaglutide) alone reached $4.6 billion in 2022, a 77% increase from the prior year and a 207% increase from 2020. (Novo brands its injectable semaglutide as Ozempic for the treatment of type 2 diabetes and as Wegovy for weight loss.) KFF found that Part D spending on GLP-1s has grown exponentially every year since 2018. Eli Lilly’s Trulicity (dulaglutide), an older GLP-1 that hit the market in 2014, saw the second-highest gross Part D spending among all therapies in 2022 at $6.2 billion. Ozempic, meanwhile, sat at No. 6. KFF speculated that both Ozempic and Novo’s oral semaglutide Rybelsus could be selected for Medicare drug price negotiation as early as 2025. 

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